Internal Controls Now Include Internet, Mobile Phones

Senior Editor

The organization that designs internal controls used in most public companies updated its 20-year old framework on Tuesday to better adapt to changes in technology, governance, and risk assessment over the past two decades.

The Committee of Sponsoring Organizations of the Treadway Commission (COSO), developed an internal controls system in 1992, that was adopted by most companies as their framework when the corporate overhauls from the Sarbanes-Oxley Act of 2002 went into effect.

The group, which includes the American Accounting Association, American Institute of Certified Public Accountants, Financial Executives International, Institute of Management Accountants and Institute of Internal Auditors decided to begin updating the framework in 2011, to bring it into the 21st century.

Nearly across the board, mid-market executives are hiring new employees, buying new technology solutions, acquiring businesses to reach new markets and preparing IPOs, according to a Deloitte survey of more than 500 mid-market executives. But companies are running up against a number of constraints as they seek to expand, particularly in acquiring and retaining skilled talent.